Journal of Banking & Finance Vol. 161 2024
Task-oriented speech and information processing
Abstract
We examine the impact of task-oriented speech (TOS) on market participants’ ability to process new information, where TOS quantifies a more direct method of communication. Focusing on a widely publicized information event, conference calls, we show that greater TOS is associated with lower ex-post total and idiosyncratic volatility and abnormal trading volume, even after controlling for linguistic characteristics, hard versus soft information, industry effects, and ex-ante implied volatility. TOS also impacts financial analysts: forecast error, forecast dispersion and disagreement are lower during the subsequent quarter. Overall, greater use of TOS increases the ability of financial markets to efficiently evaluate new information.
- DOI
- 10.1016/j.jbankfin.2024.107095
- Volume
- 161
- Pages
- 107095
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib